Friday, August 18, 2017

FW: [Maybank IB] Today's Research - Malaysia-Perisai Petroleum Teknologi: Set to sell SJR stake. Perisai Petroleum Teknologi has regained the right to sell its 51% stake in SJR Marine (L) Ltd, a ship charterer jointly controlled with Singapore-listed Emas

 

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COMPANY
RESEARCH

Allianz Malaysia | 2Q17 core results in line
Desmond Ch'ng

Carlsberg Brewery Malaysia | 2Q17: On track
Liew Wei Han

ViTrox Corp | Ripe for profit-taking
Ivan Yap

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MACRO
RESEARCH

Philippines | Sustained GDP growth momentum
Suhaimi Ilias

Malaysia | Oil Stocks: Divergence Play
Nik Ihsan Raja Abdullah

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COMPANY RESEARCH

Malaysia

TP Revision

Allianz Malaysia (ALLZ MK)
by Desmond Ch'ng

Share Price:

MYR14.52

Target Price:

MYR16.40

Recommendation:

Buy

2Q17 core results in line

2Q17 core net earnings were in line with expectations and our forecasts are unchanged. Our SOP-derived TP is nevertheless raised to MYR16.40 from MYR14.70 and this is upon rolling forward our valuation matrix to end-2017 from end-2016 before. We maintain our BUY call on Allianz for its strong fundamentals and solid management.

FYE Dec (MYR m)

FY15A

FY16A

FY17E

FY18E

Net earned premiums

3,504.3

3,690.5

3,812.0

3,896.8

Core profit (MYR m)

308.9

312.1

314.7

337.3

BVPS (MYR)

7.6

8.3

9.4

10.5

P/B (x)

1.9

1.7

1.5

1.4

EVPS (MYR)

na

na

na

na

PEV (x)

na

na

na

na

VNB (MYR)

na

na

na

na

VNB multiple (x)

na

na

na

na

ROE (%)

na

na

na

na

ROA (%)

2.3

2.1

1.9

1.9

Malaysia

Results Review

Carlsberg Brewery Malaysia (CAB MK)
by Liew Wei Han

Share Price:

MYR14.70

Target Price:

MYR15.60

Recommendation:

Hold

2Q17: On track

2Q17 results were within expectations. Solid growth by Singapore ops was mainly due to robust sales, positive currency impact and possibly timing of A&P and less price discounts. As for its associate company, Lion Brewery, a narrower loss could provide a boost to CAB's earnings. We maintain our earnings forecasts, HOLD call and DCF-TP of MYR15.60 (WACC: 8.0%, LT growth 2.0%).

FYE Dec (MYR m)

FY15A

FY16A

FY17E

FY18E

Revenue

1,659.9

1,679.5

1,732.4

1,805.6

EBITDA

306.0

327.8

341.3

356.7

Core net profit

228.3

205.0

230.4

245.6

Core EPS (sen)

74.7

67.0

75.4

80.3

Core EPS growth (%)

7.9

(10.2)

12.4

6.6

Net DPS (sen)

72.0

72.0

75.0

80.0

Core P/E (x)

19.7

21.9

19.5

18.3

P/BV (x)

13.4

14.0

13.5

12.9

Net dividend yield (%)

4.9

4.9

5.1

5.4

ROAE (%)

66.7

62.4

70.5

72.2

ROAA (%)

34.5

31.0

34.2

35.0

EV/EBITDA (x)

11.7

13.0

13.2

12.6

Net debt/equity (%)

net cash

net cash

net cash

net cash

Malaysia

Rating Change

ViTrox Corp (VITRO MK)
by Ivan Yap

Share Price:

MYR4.80

Target Price:

MYR4.20

Recommendation:

Sell

Ripe for profit-taking

We lift FY17/18/19 net profit forecasts by 6%/8%/19% on higher volume sale across all divisions (2Q17 demand was strong); also to factor in ViTrox's expansion into Campus 2.0 by end-2017. Arguably a champion in the inspection equipment space, we believe that ViTrox deserves to trade at 19.5x FY18 PER (from 18x), a 20% premium over regional peers. Despite a higher TP of MYR4.20 (+17%), we believe that its near-term earnings growth potential has been fully priced in; downgrade to SELL.

FYE Dec (MYR m)

FY15A

FY16A

FY17E

FY18E

Revenue

160.3

234.0

311.9

381.1

EBITDA

59.1

65.2

99.5

125.2

Core net profit

51.1

61.2

83.7

101.6

Core EPS (sen)

10.9

13.0

17.7

21.5

Core EPS growth (%)

2.1

19.6

36.5

21.3

Net DPS (sen)

2.5

3.3

4.4

5.4

Core P/E (x)

44.2

37.0

27.1

22.3

P/BV (x)

10.8

8.6

7.0

5.7

Net dividend yield (%)

0.5

0.7

0.9

1.1

ROAE (%)

23.1

27.5

28.5

28.0

ROAA (%)

21.2

19.4

19.1

18.4

EV/EBITDA (x)

12.7

12.2

22.2

17.4

Net debt/equity (%)

net cash

net cash

net cash

net cash

MACRO RESEARCH

PH: Philippines 2Q 2017 GDP

Sustained GDP growth momentum
by Suhaimi Ilias

Economics Research

Real GDP growth was sustained at +6.5% YoY in 2Q 2017 (1Q 2016: +6.4% YoY) on the back of steady domestic demand balanced the slower growth in net external demand. On QoQ basis, the economy grew +1.7% (1Q 2017: +1.3% QoQ). Maintain our full-year growth forecast of +6.4% (official: +6.5% to +7.5%).

MY: TRADERS' ALMANAC

Oil Stocks: Divergence Play
by Nik Ihsan Raja Abdullah

Technical Research

FBMKLCI rose 2.56pts to 1,776.31 yesterday, led by gains in GENM, IJM, PCHEM and AMMB. Market breadth was positive with gainers outpacing losers by 494 to 332. A total of 1.80b shares worth MYR1.88b changed hands. With US markets ended lower overnight, the FBMKLCI may take a breather after rising for the four consecutive days. Profit taking activities will likely pick up ahead of the weekend break. Technically, we expect FBMKLCI to range between 1,765 and 1,780 today.

NEWS

Outside Malaysia:

U.S: Factory output declines on weaker auto production in July. A slump in motor vehicle production pushed down U.S. factory output unexpectedly, Federal Reserve data showed. Factory output dropped 0.1 after 0.2% gain. Total industrial production, which also includes mines and utilities, increased 0.2% after a 0.4% rise. Manufacturing output minus motor vehicles rose 0.2%, reflecting a pickup in non-durable goods production. (Source: Bloomberg)

E.U: ECB officials expressed concern over risk of Euro overshoot. European Central Bank officials sounded the alarm at the threat of an even stronger euro, as the currency's gains to the highest since they unveiled quantitative easing in 2015 cloud efforts to revive inflation. "While it was remarked that the appreciation of the euro to date could be seen in part as reflecting changes in relative fundamentals in the euro area vis-a-vis the rest of the world, concerns were expressed about the risk of the exchange-rate overshooting in the future," an account of the July 19-20 policy meeting published by the ECB showed. The single currency has gained 11% against the dollar this year and 5% on a trade-weighted basis as an economic recovery spreads through the 19-nation region. The currency this month reached its highest level against the dollar since January 2015. (Source: Bloomberg)

U.K: Retail sales rose more than forecast in July, driven by the biggest jump in purchases of food in almost two years. The volume of goods sold increased 0.3%, the Office for National Statistics said. The increase in June was revised down to 0.3% from 0.6%, though the total for the second quarter was unrevised. Sales in July were largely driven by food, and figures covering the past three months show how pressure on consumers from faster inflation is weighing on retailers. Annual growth in the quarter through July was 1.8%, the weakest in almost four years. Price increases have accelerated in the past year largely because of the pound's decline since the Brexit vote. (Source: Bloomberg)

Brazil: Economy fails to gain traction in 2Q 2017. Brazil's economy expanded less than forecast in June and barely grew in the second quarter, as the government's plans to push through its reform agenda were waylaid by President Michel Temer's battle against corruption charges. Brazil's economic activity index, a proxy for gross domestic product, rose 0.5% in June according to data published by the central bank. Activity in the second quarter expanded just 0.25 percent in seasonally adjusted terms compared to the first three months of the year, according to Bloomberg calculations. (Source: Bloomberg)

Other News:

Serba Dinamik Holdings: To take part in MYR1.4b Johor development. Serba Dinamik S/B is planning to take part in an integrated industrial, commercial and residential project worth an estimated MYR1.4b in GDV, on some 132 acres (53.42ha) of land in Pengerang, Johor. Serba Dinamik intends to ink two memorandums of agreement (MoAs) with two companies namely Izin Budi S/B and AlMurisi Holdings S/B, to undertake the integrated development at the 132-acre site. Under the MoAs, Serba Dinamik shall participate in the engineering, procurement, construction and commissioning of the project. It is envisaged that the project shall comprise of Pengerang eco-Industrial Park (PeIP), Pengerang International Commercial Centre as well as mixed residential and commercial development, namely Pengerang Northshore Residence. (Source: The Edge Financial Daily)

Kerjaya Prospek: Wins MYR442m contract to build condo in Batu Kawan. Kerjaya Prospek Group has secured a MYR442m contract to undertake a condominum project in Batu Kawan, near the Second Penang Bridge, from Aspen (Group) Holdings Ltd. It will undertake the main building works for the "Vertu Resort" – a project jointly developed by Aspen Group and IKEA Southeast Asia. The project consists of five condominium blocks ranging from 20-storeys to 36-storeys consisting of 1,246 condominiums to be built above an eight-storey car park podium with one storey above the car park for community recreational facilities. Work is expected to start on Sept 4 and due to be completed within 38 months. (Source: The Sun Daily)

Glomac: Sued for over MYR100m by JV partner. Glomac is being sued by its JV partner Score Option S/B, which is claiming for over MYR100m in compensation from the company in relation to a property project. Its wholly-owned unit Glomac Alliance S/B (GASB) received Score Option's writ and statement of claim on Wednesday. Score Option had demanded "a compensation sum of MYR107.8m for the loss of land; unspecified amount of loss of expenses of the project; and 22% of GDV of the project or minimum of MYR47m, whichever is higher". (Source: The Edge Financial Daily)

Fajarbaru Builder Group: We have 'a good chance' for LRT3 jobs – Fajarbaru. Fajarbaru Builder Group has a good chance of getting its hands on the anticipated 37km LRT3 project that connects Bandar Utama to Klang. The company has tendered for five contracts under the MYR9b Bandar Utama – Klang LRT3 project, including for the development of a depot, wire duct and stations. (Source: The Edge Financial Daily)

Perisai Petroleum Teknologi: Set to sell SJR stake. Perisai Petroleum Teknologi has regained the right to sell its 51% stake in SJR Marine (L) Ltd, a ship charterer jointly controlled with Singapore-listed Emas Offshore Ltd (EOL) following the lapse of a settlement agreement with EOL. This was because the final deadline to satisfy the conditions precedent under the settlement deal had passed. (Source: The Star)

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